Challenges and Marketing Opportunities in the Cannabis Industry
When you work in an area that is continuously changing owing to legislation, staying ahead of any possible issues is critical.
It is worth noting, however, that this list of issues facing the cannabis business in 2022 excludes several hurdles related to legalization and regulation. This indicates that the cannabis sector is now seeing commercial development with less government intrusion.
Growth in the cannabis sector might have the same effect as a significant shift in an agricultural trend.
Before the year 2022, agricultural and entrepreneurial cannabis specialists should review these issues.
An Overview of Cannabis Regulation in the United States
As the sector expands, it must adapt to a rapidly changing and complicated legal context. The issue for cannabis enterprises is that different states within the United States, as well as foreign nations, have varied regulations governing the legality, consumption, distribution, and growth of cannabis.
Cannabis legalization has been a decisive element in its rise as a business in the United States. Until recently, cannabis was illegal in all forms.
It was unlawful to cultivate, purchase, or sell the plant. Many of the rules governing the cannabis sector, however, have been altered.
Many individual states have approved laws legalizing the medicinal use of cannabis plant material, while many others have passed laws legalizing its recreational use.
The cannabis legalization movement began in 1996 when California passed Proposition 215.
The first grassroots push to legalize medicinal marijuana to treat HIV patients culminated in the profitable establishment of storefront collectives.
The Cannabis Industry's Challenges in 2022
Quality of Human Resources
Employers will be required to react to concerns about fair salaries, equal chances, and other human resource issues that afflict regulated enterprises as a result of upcoming government labor legislation.
Acceptance as a legal drug in the nation's economy is a setback for the sector, and it must conform to remain a part of society.
Cannabis producers and storefront owners must consider how to retain competent personnel happy in their professions.
Keeping staff pleased, trained, and motivated are excellent methods for emerging cannabis enterprises to stay ahead in 2022.
Banking Opportunities are Limited
According to Insurance Journal, the main challenges for cannabis firms are those imposed on the sector by the media and government regulators.
Regulations make common business difficulties more challenging. Finding a banking option that is permitted may be a problem for your cannabis business in 2022.
For example, cannabis firms are unable to engage with federally insured banks, presenting a hurdle for smaller enterprises. As a result, operations with private backing continue to dominate.
Public Housing Legality
If you want to find more consumers for your product, you need to be aware of any obstacles that are preventing potential purchasers from purchasing it.
Many potential purchasers are discouraged from acquiring or consuming cannabis since it is permitted in public housing.
Its designation as a narcotic poses this obstacle, which can only be overcome by voting to keep cannabis legislation consistent with other business standards.
Operating In Cash
Many cannabis firms must continue to operate using cash for transactions, and obtaining bank loans is difficult.
Also because the plant is classified as a controlled substance by the federal government, many banks are unable to receive money or make loans because it would be considered money laundering.
This also poses a hurdle when dealing with any FDIC-insured bank. Federal laws will determine whether banks will engage with marijuana-related firms in 2022.
Medical Professionals Face Stigma
Today, more doctors and healthcare facilities support marijuana use than ever before. However, a sizable proportion of the general public continues to feel that cannabis and medicinal marijuana should be outlawed.
This stigma in hospitals poses a significant hurdle that every business owner in this market should be aware of: institutions that promote cannabis do not get government financing.
As the legal cannabis market grows, more established firms from outside the sector are growing their presence.
The "addiction" industries—alcohol, tobacco, and pharmaceuticals—have made significant investments in the cannabis sector. They have been purchasing various firms with the intention of selling cannabis on a large scale in the same way that they do their other products.
This movement has the potential to drastically alter the cannabis market.
The VA Does Not Provide Cannabis
The Department of Veterans Affairs has the same challenges as the hospitals described above. Veterans who attend the VA will not be provided with cannabis.
The potential consumer, on the other hand, would profit from consuming this drug to help with post-traumatic stress disorder.
Gun Legislation
It may not appear to be a big deal at first, but regulation in the weapons business is generating a stir among some cannabis activists. The problem may be found on The Firearms Transaction Record (ATF Form 4473).
This is the federal government's obligatory paperwork that must be signed by the purchaser when purchasing a firearm. If the customer has used marijuana unlawfully, the sale is denied.
Small obstacles like this continue to mold society, fostering a negative connotation that harms the sector.
Four! Biggest Challenges for Cannabis Cultivators and How to Overcome Them
According to research, four of the most significant issues licensed cannabis producers will face in 2022 are Pest and insect/disease prevention and control, improving yields, reaching target terpene/cannabinoid content, and lowering costs and competition.
This information comes from the Cannabis Business Times' State of the Cannabis Cultivation Industry Report.
According to the data collected in the research study, one in every three cannabis cultivators considers one of these four challenges to be the most difficult problem they're facing this year.
Let's look at each of the problems as well as the opportunity to overcome them and create even greater outcomes from your expand operations in the future.
Challenge 1: Prevention and Control of Insects and Pests / Diseases
According to the findings of the study, 31% of cannabis producers who answered the research survey selected bug and pest/disease prevention and control as the most difficult growing problem they now face.
This number would be unsurprising if the vast majority of survey respondents were outside producers, but that was not the case.
The majority of cultivator responses (54%) say that they exclusively cultivate cannabis indoors, with only 6% reporting that they do not grow at all.
Indoor producers are experiencing issues with inset and pest/disease prevention and control, which should not be the case.
A clean indoor growth environment is very attainable with the correct, regular inputs. It is up to each cultivator to make the required modifications and investments to overcome this barrier, and doing so as soon as feasible is surely in their best interest.
Challenge 2: Increasing Yield Is The Second Challenge
Everyone in the cannabis supply chain is thinking about business development, and cultivators are no exception, especially when it comes to raising yields and optimizing the return on investment for their grow facilities.
According to the State of Cannabis Growing Report, 30% of grower respondents said that boosting production is their most difficult cultivation difficulty.
As you may be aware, cannabis manufacturing expenses increased in 2021 due to a variety of variables, including COVID-19-related supply chain bottlenecks and delays.
These delays impacted the supply and pricing of everything from peat, perlite, and coco to toilet paper for cannabis growers.
Increasing output while keeping expenses under control necessitates strategic thinking at both the agricultural and operational levels. It necessitates adaptation, flexibility, and a laser-like emphasis on consistency.
Cannabis planters that are not hesitant to attempt new inputs or test modest adjustments to their operations will reap significant benefits in the future in terms of greater yields and optimum ROI.
Challenge 3: Achieving the Desired Terpene / Cannabinoid Content
The cannabis business is changing. No, this isn't about federal legalization.
This is about changing from a brand-driven market to a consumer-driven industry as people grow more knowledgeable about legal cannabis products, preferences develop, and demand expands beyond the THC level.
Savvy cannabis consumers are becoming more frequent, and more individuals are understanding how terpenes and cannabinoids interact together to generate an entourage effect that the body's endocannabinoid system responds to positively.
With that in mind, it's not surprising that 28% of Cannabis Business Times poll respondents described reaching appropriate terpene/cannabinoid concentration as their main cultivation problem.
The bottom line, the cannabis business must change with consumers, and consumers are getting more knowledgeable, opinionated, and picky when it comes to purchasing brands and goods.
Now is the moment for growers to invest in the infrastructure, technology, and personnel needed to not only meet but even surpass those altering needs.
Challenge 4: Price Decline and Competition
According to the findings of the State of the Cannabis Cultivation Industry Report, 28% of cannabis producers see competition and dropping pricing as their most significant operational challenges.
Of course, this amount fluctuates greatly from state to state. If this study had just been presented to California cannabis farmers, the proportion would almost certainly be substantially higher.
The crucial thing to remember is that competition is increasing throughout the United States, and the more open a state's legal market is, the more probable prices are to fall.
While farmers cannot control the price at which their crops can be sold, they can manage the cost of growing those crops.
Every input should be examined, and only those with the greatest consistent quality, largest yield, and highest ROI should be employed.
When every cent matters, everything should be scrutinized and tested. When was the last time you tested your inputs?
How to Overcome Cannabis Cultivation Difficulties
Overcoming cannabis production issues for indoor producers begins with your input. For example, choosing the best soil has demonstrable benefits such as cheaper costs, less risk, improved quality, and better yields.
Look for dependable solutions to cut cultivation labor expenditures. For example, did you know that there are chances to minimize labor expenses without sacrificing quality at any stage of the growth cycle simply by changing your growth media?
Reduce labor expenses by lowering the frequency of transplanting, giving nutrients and water to your plants as needed and on-demand, minimizing the quantity and types of inputs required and removing stages from your procedures.
All of these advantages result in cheaper expenditures for your organization and a higher ROI on your entire expansion operation.
Change may be nerve-racking, so always begin with testing. If you want your firm to be competitive in the future, you must measure your outcomes and change your operational methods as needed.
Effective Digital Marketing Strategy
The efficient use of digital channels to increase sales and establish a client base are two of the key digital transformation problems that the cannabis sector confronts.
Many cannabis businesses struggle with being efficient, and effective, and monitoring the impact of their marketing channels such as paid media, local SEO, enterprise SEO, content strategy, and social media.
One of the biggest issues these organizations have, in our opinion, is their digital experience, website design, and brand presentation.
The marketing business will encounter several issues in 2022. There is, nevertheless, the opportunity for expansion.
Looking Forward to Growth in a Growing Industry
Keep the above list of challenges in mind as you begin the next year of business growth. It's a good idea to come up with remedies to the problems listed on this list.
If you can't come up with your answers, you'll need to seek expert help to feel secure enough to expand your firm.
The cannabis sector in the United States is expanding like never before, but you may not be able to beat your competitors in the market if you don't address some typical obstacles.
Keep connected to your industry to stay ahead of your competition, and be alert to anything new that may disrupt how you conduct business in the next year.
Conclusion
Though the cannabis business is expanding and its usage is becoming more acceptable in society, it confronts significant difficulties.
In 2022, these developments will also produce a turbulent and rapidly changing environment for both investors and cannabis entrepreneurs.
The key difficulty for investors will be determining which of the hundreds of startups and established cannabis firms can weather the storm and thrive in the long run.